The North Dakota Supreme Court issued an opinion last week resolving a constitutional question of public vs. private ownership of mineral interests in the area between the high and low water marks along navigable waters (commonly known as the “shore zone”).  Ultimately, the court found that the state’s interest in minerals begins at the high water mark, unless a private landowner traces title to the low water mark back to a grant from the state itself.

The dispute arose when the North Dakota Department of Trust Lands – the agency that manages the state’s mineral interests – conducted surveys to determine the high water mark along the Missouri and Yellowstone rivers in northwestern North Dakota.  The surveys were ultimately used to delineate the high water mark boundary between mineral interests owned by the state and those owned privately.  But landowners called into question the state’s claim to shore zone mineral interests, focusing particularly on N.D.C.C. § 47-01-15, a state statute dating back to territorial times; specifically, the statute provides that “the owner of the upland, when it borders on a navigable lake or stream, takes to the edge of the lake or stream at low water mark.”

Recognizing these competing claims, Statoil (then known as Brigham Oil) filed an interpleader action that named purported shore zone mineral owners in one spacing unit as defendants and asked the district court to resolve the issue.  A group of private owners with disputed shore zone mineral interests also filed a putative class action seeking a declaration that the state’s mineral ownership begins and ends at the low water mark, not the high water mark.  The court consolidated the cases to address the central legal question – namely, the interpretation of N.D.C.C. § 47-01-15 as it concerns mineral interests – and ultimately granted summary judgment for the state.

On appeal, the state argued that it took title to mineral interests below the high water mark at statehood from the federal government under the Equal Footing Doctrine, and that N.D.C.C. § 47-01-15 acts as a rule of construction for conveyances, not as an affirmative grant.  The private owners, on the other hand, relied on case law from North Dakota and other states to assert that they retained mineral interests to the low water mark by virtue N.D.C.C. § 47-01-15, subject to the state’s reservation of certain common law rights under the Public Trust Doctrine. 

The North Dakota Supreme Court ultimately resolved the question in favor of the state, finding N.D.C.C. § 47-01-15 to be a rule of construction so as to avoid interpreting it as an unconstitutional gift under North Dakota’s anti-gift clause.  But the court left open the possibility of private ownership of shore zone mineral interests in instances where the chain of title establishes the state granted its interests to a private owner.